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<html><head></head><body><p><b>Cisco's Outlook Pulls Nasdaq Down 43</b><br>By MEG RICHARDS AP Business Writer<br>NEW YORK, Feb 04, 2004 (AP Online via COMTEX) --<br></p><p>Investors punished the technology sector Wednesday, selling off stocks after networker Cisco Systems Inc. said the outlook for business spending was tentative. Blue chips also dropped lower in volatile trading. </p><p>In late afternoon trading, the Dow Jones industrial average was down 20.81, or 0.2 percent, at 10,484.37. The broader gauges were also lower. The Nasdaq composite index tumbled 43.44, or 2.1 percent, to 2,022.77. The Standard & Poor's 500 index lost 8.82, or 0.8 percent, to 1,127.21. </p><p>The fact that the tech-heavy Nasdaq slumped because of Cisco's less-than-stellar forecast underscores that "a lot of good news is priced in, and any sort of disappointment can affect prices disproportionately," said Brian Pears, head equity trader at Victory Capital Management in Cleveland. </p><p>"Broadly speaking, I still feel pretty good; the economy is clearly growing at this point," Pears said, adding that he would be keeping an eye on the government payroll report due Friday. "I think the market's going to hold its breath until we get those numbers." </p><p>Wall Street has traded sideways for several sessions, with blue chip shares showing greater strength than more speculative tech and small-cap stocks as cautious investors move to defensive positions. As earnings season winds down, some analysts say the markets may be headed for a pause, but despite Wednesday's tech selling, investors don't seem ready to pull out of the market in large numbers yet. </p><p>"Today, there's a lot of indecision. This market is as wimpy as I've seen in a long time," said Brian Belski, market strategist at Piper Jaffray. " But there's a lot of pent up of buying demand, lots of inflow into the market, so I tend to think it's t4oo early to jump on the correction bandwagon." </p><p>Corporate earnings have beaten forecasts overall and economic numbers have been consistently strong. A better-than-expected rise in factory orders for December, reported Wednesday by the Commerce Department, offered further evidence that the recovery remains on track. </p><p>Cisco dropped $2.26, or 8.6 percent, to $24.15, although its earnings beat Wall Street's expectations. Industry observers had watched the results for signs that businesses were investing more in tech, but the networking equipment company indicated any rebound in spending remains uncertain. </p><p>Another significant decliner on the Nasdaq was Ciena Corp., which plummeted $1.27, or 17 percent, to $6.02, after the telecommunications equipment maker warned investors that its first-quarter revenues were likely to fall short of forecasts. The company blamed the shortfall on the timing of a single order. </p><p>Tech stocks on the Dow also took some heavy hits. Hewlett-Packard Co. skidded 77 cents to $23.14, while Intel Corp. dropped $1.16 to $30.20 and Microsoft Corp. fell 14 cents to $27.15. </p><p>McDonald's Corp. rose 26 cents to $26.41 after Smith Barney raised its price target for the fast-food retailer, citing a franchisee survey that points to strong sales momentum. </p><p>General Mills Inc. lost 66 cents to $44.99 a day after the cereal maker disclosed that federal investigators had made a preliminary decision to recommend civil action against it over its sales practices. Food industry experts say the case probably centers around incentives and fees paid to retailers for prominent product placement on store shelves. </p><p>China Life Insurance Co. was down $2.17, or 7.5 percent, at $26.63, after it failed to release details about a recent investigation by China's National Audit Office. The company, which controls nearly half of mainland China's insurance market, debuted on the global market in December with a $3 billion initial public offering. </p><p>Decliners outnumbered advancers by nearly 3 to 1 on the New York Stock Exchange. Volume was at 1.23 billion shares, compared with 1.16 billion shares traded at the same point Tuesday. </p><p>The Russell 2000 index, which tracks smaller company stocks, was down 11.36, or 2 percent, at 567.79. </p><p>Overseas, Japan's Nikkei stock average sank 1.8 percent Wednesday. In Europe, France's CAC-40 closed down 0.8 percent, Britain's FTSE 100 finished 0.2 percent higher and Germany's DAX index fell 0.7 percent in late trading </p><p>---- </p><p>On the Net: </p><p>New York Stock Exchange: http://www.nyse.com </p><p>Nasdaq Stock Market: http://www.nasdaq.com </p><br>Copyright 2004 Associated Press, All rights reserved</body></html> 0
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